Product selection: Many consumers just want better features

Consumers who are less knowledgeable about a product typically make choices based on differences that are easy to compare among the available options, according to a new study in the Journal of Consumer Research.

"Companies expend a lot of resources on research and development to introduce new and unique features, without recognizing that many of their customers have a preference for better rather than different features," write authors Myungwoo Nam (INSEAD, Singapore), Jing Wang (University of Iowa), and Angela Y. Lee (Kellogg School of Management, Northwestern University).

In studies involving electronic products such as cell phones, digital cameras, MP3 players, and laptops, the authors showed that expertise influences whether consumers choose products based on differences in standard features versus unique or extra features that are not shared by other brands. Consumers with little product knowledge made choices based on basic features that could be easily compared among brands. "Whereas novices rely more on standard features in making decisions, experts are more likely to use unique attributes instead," write the authors.

This leads the authors to suggest that companies should distinguish between expert and novice consumers. For example, in the point and shoot digital camera market, where most consumers are novices, companies may be better off competing on having a higher number of pixels because the number of pixels can easily be compared across different brands. However, in the digital single-lens reflex (DSLR) market, consumers are more sophisticated and are likely to recognize that the number of pixels is just one of many factors affecting picture quality. Therefore, companies competing in the DSLR market should try to develop other unique attributes that cannot be directly compared with other brands.

"When companies are targeting experts, their strategy should focus more on developing products with unique attributes; and when companies are targeting consumers with little product knowledge, they should improve existing features and highlight their superior performance," the authors conclude.